On top of the pain and rigors of litigation, do you really want to pursue an action for malicious prosecution against your adversary after prevailing to try to win back your attorney’s fees (where attorney’s fees are not otherwise recoverable in the underlying action)? Is this throwing good money after bad?For truly frivolous legal actions, California Code of Civil Procedure Section 128.7 (like the analogous Federal Rule of Civil Procedure, Rule 11) provides a remedy. Where a case is provably groundless as a matter of law or fact, Section 128.7 might be a viable way to try to force an end to litigation at an early stage, and at the same time, permit a party to recover its attorney’s fees.A recent case, Peake v. Underwood (July 17, 2014), shows how Section 128.7 can work.

On top of the pain and rigors of litigation, do you really want to pursue an action for malicious prosecution against your adversary after prevailing to try to win back your attorney’s fees (where attorney’s fees are not otherwise recoverable in the underlying action)? Is this throwing good money after bad? For truly frivolous legal actions, California Code of Civil Procedure 128.7 (like the analogous Federal Rule of Civil Procedure, Rule 11) provides a remedy. Where a case is provably groundless as a matter of law or fact, Section 128.7 might be a viable way to try to force an end to litigation at an early stage, and at the same time, permit a party to recover its attorney’s fees.

Code of Civil Procedure section 128.5 had been in effect until December 31, 1994, but expired in 1995, leaving only its companion, Cal. Code of Civil Procedure section 128.7, in effect. That “watered down” statute was narrower, allowing sanctions for filing meritless and frivolous complaints, motions, or other pleadings, but not for other bad faith litigation tactics and conduct.

However, the Court of Appeal reversed, holding that it was Plummer's conduct during the deposition (in which Plummer questioned his own client) that highlighted the discrepancy between Yanez's deposition testimony and a witness statement Yanez had previously written about the accident, which ultimately resulted in the termination of Yanez's employment. See also Optimal Markets, Inc. v. Salant, 221 Cal. App. 4th 912 (2013) (Cal. Code Civ. Proc. § 128.7 sanctions motion against attorneys who prosecuted allegedly frivolous trade secrets claim in arbitration was properly denied).Court Affirms $700,000 Attorney's Fee Award To Demoted Employee Who Recovered Only $27,280Muniz v. United Parcel Serv., Inc., 2013 WL 6284357 (9th Cir. 2013) Kim Muniz sued UPS for employment discrimination based on various theories, but proceeded to trial only on her claim of gender discrimination in violation of the Fair Employment and Housing Act.

However, the Court of Appeal reversed, holding that it was Plummer’s conduct during the deposition (in which Plummer questioned his own client) that highlighted the discrepancy between Yanez’s deposition testimony and a witness statement Yanez had previously written about the accident, which ultimately resulted in the termination of Yanez’s employment. See also Optimal Markets, Inc. v. Salant, 221 Cal. App. 4th 912 (2013) (Cal. Code Civ. Proc. § 128.7 sanctions motion against attorneys who prosecuted allegedly frivolous trade secrets claim in arbitration was properly denied).Court Affirms $700,000 Attorney’s Fee Award To Demoted Employee Who Recovered Only $27,280Muniz v. United Parcel Serv., Inc., 2013 WL 6284357 (9th Cir. 2013)Kim Muniz sued UPS for employment discrimination based on various theories, but proceeded to trial only on her claim of gender discrimination in violation of the Fair Employment and Housing Act.

(a)(10).) If no contract or statute provides for a fee award, a party might seek lesser used remedies such as the tort of malicious prosecution or a request for sanctions pursuant to Rule 11 of the Federal Rules of Civil Procedure or California Code of Civil Procedure, section 128.7. These two lesser used remedies are no longer viable options following contractual arbitration.

From a policy standpoint, the Court acknowledged that attorneys can divide the duties of conducting a case, but the division of labor does not diminish standby counsel’s liability when they fail to learn anything about a case that is maliciously prosecuted. The Court noted that attorneys have the responsibility to avoid vexatious litigation, Cal. Code Civ. Proc. § 128.7(b), and accordingly, attorneys should make a preliminary determination as to whether probable cause exists to support the asserted claims. In sum, the Court made it clear that attorneys’ ignorance of a claim’s merit is no excuse, and that, “Attorneys may [] avoid liability if they refrain from lending their names to pleadings or motions about which they know next to nothing.”

Martorana filed an amended complaint asserting malpractice against class counsel, but the trial court sustained class counsel’s demurrer to Martorana’s amended complaint as well, finding that “it would defeat the purpose of mass notification to a large number of class members if, after written notice, Class Counsel were required to follow up…with every class member who neglected to file a timely claim.” The Court of Appeal affirmed dismissal of Martorana’s claims but reversed the award of sanctions to Allstate because of its failure to comply with the safe harbor provisions of Cal. Code Civ. Proc. § 128.7. Cf. In re Consumer Privacy Cases, 2009 WL 1863730 (Cal. Ct. App. 2009) (trial court did not abuse its discretion in approving attorney’s fees award to class counsel and in using lodestar method); Hernandez v. Vitamin Shoppe Indus. Inc., 2009 WL 1679937 (Cal. Ct. App. 2009) (class counsel’s communications with conditionally certified and separately represented class members urging them to opt-out of settlement were properly enjoined by trial court).